Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

How the deadly coronavirus brought an industry to its knees: The 'cruise lines 9/11'

How the deadly coronavirus brought an industry to its knees: The 'cruise lines 9/11'

The dramatic situation aboard Princess Cruises’ ships and the response by authorities has brought the entire cruise-line industry to its knees. Norwegian Cruise Line, Royal Caribbean Cruises and Carnival Corp.’s Princess Cruises were left with little choice but to suspend voyages last week. Carnival Corp.’s stock has dropped by nearly 60% while Royal Caribbean and Norwegian have lost more than 70% of their value over the past 30 days.

Jackie Ceren has seen a lot in 41 years working in the travel industry, but she’s never seen anything like what’s happened to the cruise industry since the outbreak of the deadly coronavirus.

Passengers have fallen ill and died as cruise ships become the sites of epidemics. In response, ports have denied vessels entry, travelers have canceled trips and the largest cruise companies in the world have suspended operations.

“I’ve only ever seen them close cruise ports for like hurricanes or earthquakes,” said Ceren, a travel agent based out of Florida. “And I’ve been through SARS, Ebola, Swine Flu. I’ve seen it all.”

Every booking she had has now canceled. “This is like a travel apocalypse,” Ceren said.

Two of her clients were actually stuck at sea. Ray Cutro, 73, and his wife Arline ultimately made the decision to abort their four-month Viking cruise trip around the world.

They were just over two months in, Cutro said, and the ship was sailing around Australia trying to re-chart a course that avoided China, then the epicenter of the new coronavirus pandemic. It was the end of February, he said, and ports around Southeast Asia were turning the ship away, fearing a situation similar to that which occurred earlier in February when an outbreak spread aboard the Diamond Princess in Japan.

The captain called an all-hands meeting with the passengers, Cutro said, adding that the captain and company handled the situation well. The message was, “you can get off or you can stay on, but we don’t know where we’re going,” Cutro recalled. His mind was already made up.

“We were fooling ourselves to stay,” he said, so he and his wife flew home to Florida last week.

Cutro said he paid $100,000 for the four-month cruise that was supposed to be a celebration of him and his wife’s 50th anniversary. The Viking Sun voyage was supposed to set a record for the longest continuous passenger cruise trip ever. Cutro said the company is compensating them for at least some of the trip, but the decision to cut the trip short wasn’t easy, he said. As the virus continues to sweep across the world, he thinks he made the right decision.

“The whole world feels like a cruise ship now,” he said.


‘Death Blow’

It started with the Diamond Princess, a vessel operated by Carnival Corp.’s Princess Cruises. Its 3,700 passengers and crew were quarantined at a Japanese port on Feb. 4 after a previous guest, who didn’t have any symptoms while aboard the ship, tested positive for the virus after he returned to Hong Kong.

More than 700 passengers and crew on the ship ultimately tested positive for the novel coronavirus, known as COVID-19, and at least 8 died. The Japanese government and other nations eventually evacuated their citizens from the vessel.

Another Carnival-owned ship, the Grand Princess, was forced to moor off the coast of California when 21 people tested positive for the virus. After several days, California officials brought the ship on Monday to the Port of Oakland, where the last passengers disembarked Friday for transport to federal quarantine facilities. More than 1,000 crew remained aboard the ship, which is anchored in the bay.

Amid the rapid spread of the virus on ships and on-board quarantines, the State Department last week warned Americans against traveling by cruise ship.

“When the government came out and said don’t go on anymore cruises, that was it. That was the death blow,” Ceren said. “What they have created is fear.”

California Gov. Gavin Newsom said he is weighing cruise restrictions along the California coast as he awaits new federal guidelines for the industry. He said cruise operators should introduce aggressive requirements for travelers “at the peril of that industry collapsing.”

The fallout from the deadly Princess Cruises fiasco wasn’t limited to Carnival Corp. All three publicly traded cruise line companies, including Norwegian Cruise Line and Royal Caribbean, were left with little choice but to suspend voyages as the authorities threatened to crack down.

Their stocks have collapsed, leading the market’s broader sell-off that saw the Dow lose over 20% of its value the past month. Carnival’s stock has dropped by nearly 60% while Royal Caribbean and Norwegian have lost more than 70% of their value over the past 30 days.


‘Cruise line 9/11’


Ceren compared the buckling of the cruise lines with the devastating impact of the Sept. 11, 2001 terrorist attacks on the airline industry. The federal government shut airports after the attacks; passenger demand plummeted; and businesses suspended non-essential travel. According to Ceren, the coronavirus has been even worse for the cruise lines.

“Things happen, but nothing of this caliber,” Ceren said. “This is worse than 9/11 when they were canceling flights all over the place. This is the cruise lines’ 9/11.”

Despite federal relief efforts, several major American airlines declared bankruptcy in the aftermath of the 9/11 attacks. Ceren, however, predicts the cruise lines will recover. They have already dropped ticket prices to entice customers on trips once the pandemic is under control.

Both Royal Caribbean and Norwegian Cruises have pulled on fresh lines of credit to weather the storm. Last week, Norwegian secured an additional revolving loan of $675 million and Royal announced it was increasing its revolving credit capacity by $550 million.

“These are extraordinary times and we are taking these steps to manage the company prudently and conservatively,” Royal CEO Richard Fain said.

The increasing debt is nothing to be concerned about yet, said Colin Mansfield, director at Fitch Ratings, who has experience covering the cruise industry. He added that if the outbreak is just a near-term shock to the industry, they’ll likely recover quickly once it’s under control.

“The cruise companies really have a lot of tools at their disposal,” Mansfield said, adding that cruise companies have a lot of flexibility in terms of reducing expenses to cover reduced cash flow.

“From that perspective having those options is a good thing,” he continued. “It would really only be a bad thing if this ends up being a more long-term shock than is expected right now.”


‘We don’t really know’


Customers, investors and authorities have a lot of questions about how Princesses Cruises was hit so hard by the virus and what it means for the the future of the cruise industry. Carnival Corp., so far, has few answers.

A company spokesman told CNBC that the cruise industry has taken proactive steps to provide a level of advanced screening, pre-boarding and on-ship health and safety protocols.

Leaders of the cruise industry including Carnival Corp. CEO Arnold Donald, recently met with Vice President Mike Pence and health officials regarding steps forward.

“We want to work with the cruise line industry to ensure that when we come through this, that cruise lines and the medical services that are available for the passengers and all of the crew, that cruise lines are safer than ever before and can prosper for years to come,” Vice President Mike Pence said Friday at a news briefing.

On Saturday, Pence even hinted that the cruise lines could receive financial assistance from the federal government.

But Princess Cruises President Jan Swartz admitted there remain a lot of unanswered questions.

“We’ve been asked, and we’ve asked ourselves, why COVID-19 seems to be impacting Princess so heavily,” Swartz said. “We don’t really know.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Woman Receives Gift Card for Christmas – Discovers It Is ‘Worth’ 63,000,000,000,000,000 Pounds
United Nations Calls for Global Action Against Disinformation and Hate Speech Online
Tucker Carlson warns of an inevitable clash in Western societies over mass migration
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
Italy's PM Giorgia Meloni highlights record employment and economic growth
Chancellor Friedrich Merz Re-elected as CDU Leader, Opposes AfD Influence
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
Two teens arrested in France for alleged terror plot.
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Former President Yoon Suk Yeol Sentenced to Life in Prison for Abuse of Authority
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
German Chancellor Friedrich Merz calls for real name use on social media.
Italian Police Arrest Man After Alleged Attempt to Abduct Toddler at Bergamo Supermarket, Child Hospitalised With Fractured Femur
British Tourist Arrested at Hong Kong Airport After Meltdown and Vandalism
European Commission Plans Purchase Incentives Limited to Vehicles Manufactured Largely in the EU
French District of Pas-de-Calais Introduces Immediate License Suspension for Drivers Using Mobile Phones
Volkswagen Targets €60 Billion in Cost Reductions as Sales Decline and Global Pressures Intensify
Eighty-Year-Old Lottery Winner Sentenced to 16.5 Years for Drug Trafficking
Rubio Calls for Sweeping U.N. Reform, Saying It Has Failed to End Wars in Gaza and Ukraine
10,000 Condoms Distributed at Winter Olympics 2026 Athlete Village Depleted Within 72 Hours
Poland's President Advocates for Evaluating Independent Nuclear Weapons Development
Mayor of Serdobsk in Russia’s Penza Region Resigns After Housing Certificates Granted to Migrant Family Trigger Public Outcry
China’s EV Makers Face Mandatory Return to Physical Buttons and Door Handles in Driver-Distraction Safety Overhaul
UK Green Party Considering Proposal to Legalize Heroin for an Inclusive Society
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
We will protect them from the digital Wild West.’ Another country will ban social media for under-16s
Heineken announces cut of 6,000 jobs due to declining beer demand
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
France Begins Phasing Out Zoom and Microsoft Teams to Advance Digital Sovereignty
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Global Shifts in War, Trade, Energy and Security Mark Major International Developments
Markets Jolt as AI Spending, US Policy Shifts, and Global Security Moves Drive New Volatility
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
×